"I’ve seen that the market is quite short-sighted and will often bid a stock to lofty levels based on one or two good years. Based on the current situation, I believe that a company earning over $4 TTM and still making major moves to grow should not be valued under $20. Its stock is mispriced in the short-term, likely caused by the 35 day slump in the BDI.

Longer term, an eventual recovery should see GNK exceeding the $4.73 EPS from 2009, especially with 30% more tonnage capacity in the future. If GNK can pull off $5 in full year earnings in 2012 or 2013 and the market assigns a multiple of only 7, that’s more than a double from current levels. Assigning a multiple of 7 to TTM earnings of $4.48 gives us a value of $31.36 per share.

Three to five years from now, I expect a better economy than we have right now. I expect EPS to exceed $5 at that time. If people are more bullish then, a P/E multiple of 10 would see a price of $50 for GNK. That’s not unfathomable considering the high of $84.51 in May 2008 (more than 29 times 2008 earnings). I know that was during the commodity boom, but I’m only asking for a multiple of 10 instead of 29, which I believe is quite reasonable. A multiple of 12-15 is still not unthinkable and would put it in line for considerably more than a triple from the current level.

I believe GNK is both a solid short-term and long-term play. Both profitable and unprofitable drybulk shippers have been slammed with the recent slump in the BDI. I expect a short-term bounce of 20% to 50% and a possible triple or more within 5 years. Management has done a good job with fleet utilization, achieving almost 100% as of Q1 2010. The growth is quite aggressive, but I believe the acquisitions will contribute nicely to future earnings as long as the debt level is contained."

Donnernv, thanks for the comment. Made me laugh (even without coffee this morning).

As you can see I am new here, may I ask you what your suggestion is for building credibility rather then getting passed off as a newsletter promoter.

I always link my sources and only mentioned Twitter and YouTube as ways to connect with me. I could leave off the links to the social media I suppose but considered it to help connect wtih other minds.